Stratasys posts revenue of $162M for Q3 2018, adjusts guidance for full year

Leading 3D printer manufacturer Stratasys, headquartered in Rehovot, Israel, has announced its financial results for the third quarter of 2018. Headline revenue for the quarter ended September 30, 2018, was $162 million, up 4% on the same quarter in 2017, which was $155.9 million.

In light of this quarterly performance, and following the first nine months of 2018, the company has also chosen to update its guidance for the full year ended December 31, 2018.

On a call with investors earlier today interim CEO Elan Jaglom fielded questions on topics including the forthcoming metal 3D printer, the impact of HP’s color 3D printing system and new technologies under development by Evolve Additive Solutions and Vulcan Labs, Inc.

Regarding HP, Jaglom said, “Happy to hear HP is following us and going into color. [..] I am not concerned about it, I am happy other competitors are following.”

Analysts also pressed the company on plans for “taking the fight to HP” specifically in regard to what one participant described as an attempt by HP, “to freeze the market” with the earlier announcement of Multi Jet Fusion and more recently the HP Metal Jet.

Investors were told to expect more details about the Stratasys metal system at Formnext, with few details other than that the system is a “unique technology” and very suitable for production.

Stratasys revenue is reported by the company in two segments: Products, i.e. 3D printers, materials and software, and Services, encompassing On Demand Manufacturing and consultancy.

As in previous quarters, Products continue to be the dominant segment for sales at Stratasys. In Q3 2018, revenue for Stratasys Products was $109.6 million, up 1.15% on the $108.4 million in net sales for the same period in 2017.

On the other hand, net sales for Services in Q3 2018 was reported at $52.4 million, a 10.40% variance on Q3 2017 which was $47.5 million.

Revenues

Q3 FY2018

Q3 FY 2017

Variance £ millions

%

Products

109,647

108,401

1,246

1.15%

Services

52,402

47,466

4,936

10.40%

Total

162,049

155,867

6,182

3.97%

For the nine months ended September 30, 2018, the accumulated revenue for Products was $332 million, a decrease on the same period in 2017 which was $344.5 million.

Revenue from Services however managed to close the gap between the first nine months of 2017 and 2018. For the nine months ended September 30, 2018, Services revenue was $154.1 million, up from $144.5 million for the same period in 2017. As a result, revenue for the first nine months of 2018 totals $486.1 million, compared to $489 million for the same period in 2017.

Revenues

First 9 mnths. 2018

First 9 mnths. 2017

Variance £ millions

%

Products

331,967

344,509

-12,542

-3.64%

Services

154,151

144,510

9,641

6.67%

Total

486,118

489,019

-2,901

-0.59%

In terms of longer trends, the results show a steady decline over a 5 year period. However, if the results from 2014 are excluded from the analysis below then the picture appears more positive.

In summary of the remaining results, the GAAP gross margin for Stratasys in Q3 2018 was 48.7%, compared to 48.3% for the same period last year. GAAP net loss for the quarter was $0.7 million, equating to $0.01 per diluted share, compared to a net loss of $10.2 million for the same three months in 2017, or $0.19 per diluted share.

Further for Q3 2018, the company increased in GAAP R&D expenses by 18.5% compared to the same period in 2017, to $25.8 million. The company ends the period with $348.9 million in cash and cash equivalents.

Citing the company’s presentation of its new carbon fiber 3D printing capabilities at IMTS 2018, and an ongoing partnership with American sports car racing Team Penske, Jaglom continues, “The level of engagement we are experiencing with customers in our key verticals is encouraging,”

“[…] And we are excited about the innovation we plan to bring to market to drive incremental, long-term opportunities, as we continue to invest in new products and materials across our portfolio of FDM and PolyJet technologies, our new metal additive manufacturing platform, and advanced composite materials.”

David Reis, Vice Chairman, also highlighted a number of end-use applications for Stratasys technology.

“FedEx, who are developing efficiencies in their supply chain as they work to deploy additive manufacturing facilities closer to customers as part of their FedEx Forward Depots service offering;

SSL, an aerospace customer using our FDM technology for rapid-response, customized, high-temperature lay-up tooling that previously would have been done with CNC;